I was exaggerating when I said I would accept $0 bonus, but if free is not unheard of, I suppose it could be an option. Mainly I just wouldn't worry nearly as much about the amount of the bonus for 18 months as about the amount of royalties for many years. With the large # of acres you have rights to, even a small bonus per acre would add up to a significant amount of money. Good luck with the drilling & production! Rock Man made it sound like you'll need some of that too. We're in McMullen on the west edge next to LaSalle County, which I think is supposed to be a resourceful area for depth, but with the scaling back on production by EOG in our area, and your company perhaps drilling for all they can in your shallower area, the two may end up being comparable in production for a length of time. Somewhere I read a company like EOG doesn't need to produce as much at lower prices as some smaller companies do to maintain.
Is anyone aware of any activity in Dimmit County, on Abstracts 149, A-150, A-151, A-154 and A-155? My lease expired yesterday and it had been with Eagle Ford Minerals, LLC. this is also known as the Dixondale tract.
There has been zero permit activity in the surveys you have mentioned over the past several years.
Looking at activity in the county clerk's office, there appears to be four oil companies that have taken leases over all or part of this 2,000 acre tract: Eagle Ford Minerals, LLC, Crimson, CSA Exploration, and CML.
CML is permitted to drill a well called "Barrier" to the west of this tract and I have a lease with them on A-636, 669 and 670.
CSA was the landman for Eagle Ford Minerals and the Landman for CML when I leased to both of them but my leases were directly with EFM and CML and I have not spoken with CSA in six months or more.
Being that much of the minerals on A-603, 149, 150, 151, 154 and 155 are currently leased and thus bonuses have been paid and term is running, what should a Lessor such as me expect to receive for extending for 18 months when my brother and I control approximately 10% of the minerals on this tract?
Are you looking at a 25% royalty to go with the extension?
I would think 18 month extension (which is on the short side - normally see 2 year kickers- would go for $750 to $1000 per net mineral acre right now.
Note - CML has historically been an Austin Chalk driller in Dimmit County - so having good Pugh clause in place to get deep rights severed after primary term is mandatory.
Crimson had done a lot of Buda drilling but also go after Eagle Ford (although they have slowed down on the latter)
Yes it is 25% cost free royalty
My neighbors just leased their land and rumor is that a 10,000 acre block was leased right by me (Western Bee County just south of hey 59). A little surprising with the price of oil. Does anyone have an idea of what is going on?
Yes, there has been some interest in acerage off of 59 North of Beeville near the Medio Creek towards Berclair.
I have been approached to extend a lease for 30 days despite the fact that this same lease was previously extended for 58 days so that the lessee could get a rig on site and commence drilling. Now the 58 day extension was 6 months prior to the expiration of an 18 month lease.
Operator first told me that they were going to drill a well in the Buda Formation. So i provided three options from 30 days, to 60 days, to 90 days as i want to be sure that they are sucessful in commencing the well this time.
I received a counter to my offer last weeks whereby they want rights to drill both Buda and Austin Chalk, no obligation to drill, no development penalty if they fail to drill and wanting just the land for the unit which is 640 acres.
Isnt that too much land? How much do they realistically need for their unit? My goal is to avoid allowing them to hold excess land.
Even a well stimulated horizontal well will only be tapping at most 160 acres. A fractured reservoir horizontal like that seen in the Buda or AC may drain farther away from the wellbore if a good fracture is encountered but I would still not go higher than 160 acres (more like 80 acres depending on hz well length.
What does Tx RRC say about max unit acres for a horizontal? I know that there is a formula they have that allows for a calculation of unit size based on lateral length.
So by forming a 640 unit, can the oil company hold access to a square mile for as long as the initial well is producing and drill additional wells at no additional leasing cost either when they want to or after the royalty owners start complaining that the $3.00 annual check is indicative that the well is not producing at commercially readonable levels leaving the royalty owner to initiate a fight against potentially a well funded adversary?
There should be one or more paragraphs in your lease contract that address "pooling" acres to include adjacent acres that are owned by others. 640 acres is a standard max size for a unit, but the number varies for different scenarios, such as gas or oil, vertical or horizontal. Our lease was a "paid-up" lease, meaning we received a lump sum for a 3 year lease with an option for the lessee to extend for 3 years with another lump sum payment, which they did. No further lease payments will be made since they have begun drilling and paying us royalties, and they retain the right to continue operations by virtue of continuing operations.
This was an 18 month paid up lease. First well completed with 7 months remaining and of courses a continuous drilling obligation. Seems that the lease was going to expire prior to the spudding of the next well.
I personally do not believe in options as they are certainly not in the lessor’s best interest. If the market is “hot” the lessor fails to capture the momentum. If the market “cools” the lessee either renegotiates or allows the lease to expire.
CClayton, who was your lessee and how many gross acres did your lease cover!
Thanks
Our 1st well wasn't drilled till the very beginning of year 5, but it's impossible to say they would have drilled within the first 3 years under the pressure of having no extension option. I feel safer saying it's a good thing we did allow an extension in our case. EOG is the company and I couldn't find the acreage for our unit on any documents. I think I spotted it once on the TxRRC website and it was slightly under 640 acres, not all ours.
You can likely find it on the railroad commission website and can then download the plat which will detail the land included.
Anyone got current lease rates in Burleson Co/EaglefordShale. Also anyone have any info on Halcon these days.
Could anyone give a general idea of what bonus, royalty and primary term of leases may be going for in the SW part of Atascosa and SE part of Frio Counties? Understood a good part of this acreage is HBP. Any information helpful.
Dennis -
Your interests in SW Atascosa and SE Frio are very, very, very, very valuable. In most of that area, not only is the Eagle Ford extremely productive but the Pearsall formation that runs about 2,000 feet deeper is just as productive.
If you will accept my invitation to become A Friend on The Forum, I will discuss my history in helping people in that specific area of the Eagle Ford with you.
In the meantime, I advise that you don't sign or even verbally agree to anything. And, if you don't have an experienced Oil and Gas Attorney to consult, I can suggest a couple to you.
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Does anyone have a feel for the royalty and lease bonus rates in southern Zavala county just north of Crystal City? We've been approached a couple of times over the past month by two reputable operators in that area
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My lease form is one that very clearly a 25% cost free royalty. My position is that they are getting 75% of my minerals and I am not paying for anything against my royalty other than severance taxes.
I see that I am being charged for "Oil Field Cleanup" Anybody know what that is?